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A bill that would let fastgrowing cities impose fees to cover the impact of development is headed for the state House of Representatives after being endorsed by the House Revenue and Taxation Committee Wednesday.

The measure would clear the way for cities like Coeur d’Alene and Hayden to go ahead with impact fees that the state Supreme Court last week said they could not charge without enabling legislation.

It appears Coeur d’Alene will have to reimburse the $476,000 it has so far collected from developers, even if the pending legislation passes, said Scott McDonald, executive director of …

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S-R Media, The Spokesman-Review and Spokesman.com are happy to assist you. Contact Customer Service by email
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A bill that would let fastgrowing cities impose fees to cover the impact of development is headed for the state House of Representatives after being endorsed by the House Revenue and Taxation Committee Wednesday.

The measure would clear the way for cities like Coeur d’Alene and Hayden to go ahead with impact fees that the state Supreme Court last week said they could not charge without enabling legislation.

It appears Coeur d’Alene will have to reimburse the $476,000 it has so far collected from developers, even if the pending legislation passes, said Scott McDonald, executive director of the Association of Idaho Cities.

But, he said, “It’s still going to help Coeur d’Alene.”

Coeur d’Alene City Attorney Jeff Jones said the City Council will discuss Tuesday what to do with the fees it has collected. He declined to speculate if the council will move to return the money or ask the Supreme Court for a rehearing.

For now, only Ada County can charge impact fees under 1992 legislation limited to counties with a population of more than 200,000. The new legislation drops the population limit.

With the support of Coeur d’Alene, Post Falls and several other Idaho cities, the Idaho Building Contractors Association sponsored the bill as a way of making government more accountable for the way it charges developers. The association feared a repeat of cases like California’s, where impact fees have been used for things like artwork unrelated to the impact of growth.

Supporting the measure were the state associations of cities, counties, Realtors and the Idaho Association of Commerce and Industry, which fought two broader impact fee measures last year.

The legislation requires that impact fees be used only for facilities needed as a result of local development. That can include water, sewer and storm sewer systems, roads and bridges and public safety facilities. Increased school costs, included in last year’s legislation, are not covered.

Only cities, counties or highway districts can impose the fees, and they must first create a capital improvement plan that identifies ways the fees would be used. Money collected from fees is kept in a separate account and must be refunded to the property owner if unspent after 10 years.

Several committee members subjected the bill to nearly three hours of questioning Tuesday and Wednesday and grew particularly concerned after a representative of Micron Technology said the Ada County fees have proved to be a nightmare.

Micron paid $624,000 in road impact fees in 1994 but has yet to see them used on improvements, said Susan Rowe, Micron’s government affairs coordinator.

“It has been our experience with this particular impact fee legislation that we have been asked to pay fees when there has been no apparent service delivered,” she said.

“And we’ve also been asked to pay for fees which seemingly are spent on someone else.”

Merrily Munther, a lawyer for the Idaho Building Contractors Association, said Micron’s problem stems from difficulties with the local highway district charging the fees.

“We disagree that the legislation is the cause of the problem,” Munther said Tuesday.

On Wednesday, Twin Falls Rep. Mark Stubbs agreed, as he recommended sending the bill to the House with a do-pass recommendation.

“I feel sorry for companies like Micron that are in that position,” he said, “but I feel they can sue under the statute.”

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What’s next?
Coeur d’Alene City Attorney Jeff Jones said the City Council will discuss Tuesday what to do with the fees it has collected.